Does (Investor) Coaching Matter?

The University of Alabama has had great success in recent years despite this year’s results.

For anyone who follows college football, Nick Saban is the man. His teams have won four of the last 10 BCS championships, and he boasts a lifetime record of 154-55-1. His extraordinary success has generated huge interest in his coaching style. In a recent Forbes interview Saban emphasized that he teaches his players not to think about winning or losing, but rather to focus only on the processes that will lead to success.

Italian American
Italian American (Photo credit: Wikipedia)

Investors can learn many lessons from the success of Coach Saban. By not focusing on winning or losing and rather on the process Coach Saban teaches his players to focus on the long term and forget short term noise.

Another great message from Green Bay’s own Vince Lombardi.

“Mental toughness is many things and rather difficult to explain. Its qualities are sacrifice and self-denial. Also, most importantly. It is combined with a perfectly disciplined will that refuses to give in. It’s a state of mind – you could call it character in action.”

“Once you have established the goals you want and the price you’re willing to pay, you can ignore the minor hurts, the opponent’s pressure and the temporary failure.”

“There is only one kind of discipline, and that is the perfect discipline. As a leader, you must enforce and maintain that discipline; otherwise, you will fail at your job.”

These are great inspirational quotes from one of the great motivators in Green Bay as well as American history. These quotes are very relevant to investors.

When you find a process you believe in and remain disciplined, success will be yours in the long term. And the long term is what you are investing for. You need to ignore the short term ‘noise’ of the markets and focus on you financial goals.

In my opinion most if not all of you will need the help and guidance of an investor coach. The media will fill the airways and press with financial pornography. These bullies will try to use your emotions against you when things look bleak.

Remember the press during the 2008 crisis. Much of what you read and heard from the media was that it was the end. The markets will continue down until the entire financial system collapses. All these proved to be wrong. Yet many investors sold out at the absolute bottom, thereby missing the huge recovery during the last nine months of 2009. These investors locked in their losses and will never fully recover from their decision to sell.

Some statistics might help here, from 1926 through 2013, the average recovery period from a more than 20% downturn has been 111 days. This proves that panicking during a downturn is bad for your portfolio as well as your long term financial goals.

Even today there are brokers/agents selling their ‘safe’ products by predicting the next ‘crash’. These bullies are using your emotions namely fear to sell more product.

Remember when saving for retirement and living through retirement your main risk is not capital risk or that the markets will go through down periods. You main risk is inflation. And stocks are a great way to keep pace with inflation. Actually, in my opinion, stocks are safer over the long term in maintaining your purchasing power.

So forgot the short term noise, fire your broker/agent and hire an investor coach.

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